Is VNOM a good stock to buy? We came across a bullish thesis on Viper Energy, Inc. on NickFox’s Substack. In this article, we will summarize the bulls’ thesis on VNOM. Viper Energy, Inc.’s share was trading at $46.06 as of June 8th. VNOM’s trailing and forward P/E were 19.12 and 22.78 respectively according to Yahoo Finance.
Photo from Hycroft Mining website
Viper Energy, Inc. (VNOM), a subsidiary of Diamondback Energy (FANG), is positioned as a premier Permian Basin royalty and mineral interest company offering a high-margin, capital-light exposure to upstream oil economics. Operating a pure-play royalty model, VNOM collects revenue from production without incurring capital expenditures or operating costs, creating structurally superior margins and insulation from inflation in oilfield services.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
Following over $8 billion in strategic acquisitions, including the transformative Sitio Royalties deal, and the divestiture of non-core assets for $617 million, the company has emerged as a streamlined Permian-focused powerhouse with ~85,700 net royalty acres. Development visibility remains robust with over 1,388 active wells and ~1,370 line-of-sight locations underpinning durable multi-year cash flows.
Under CEO Kaes Van’t Hof, VNOM has shifted toward disciplined capital allocation, targeting ~$1.5 billion net debt while already reducing leverage to ~1.0x EBITDA through aggressive debt repayment. The balance sheet strength supports a commitment to return upwards of 100% of cash available for distribution through a $1.52 base dividend, ~3.5% yield, variable payouts, and a $1 billion buyback program.
Reserve growth has been exceptional, with proved reserves exceeding 406,000 Mboe and a 2P NAV estimated above $10 billion, implying meaningful upside versus its ~$7.4 billion market value. High liquids exposure, strong recycle ratios, and a 705% reserve replacement ratio reinforce long-term cash generation. Even under conservative pricing, VNOM generates substantial free cash flow, while upside to oil price realizations further amplifies distributions. With de-risked structure, premium Permian exposure and strong capital returns, Viper Energy offers asymmetric upside from NAV recognition.
Previously, we covered a bullish thesis on Texas Pacific Land Corporation (TPL) by Six Bravo in December 2024, which highlighted acreage acquisitions, water segment strength and S&P 500 inclusion tailwinds. TPL’s stock price has depreciated by approximately 1.86% (adjusted for stock split) since our coverage. NickFox shares similar view but emphasizes Permian royalty exposure leverage reduction and NAV upside in Viper Energy (VNOM).
Viper Energy, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held VNOM at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of VNOM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VNOM and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
